6. Active labour market policy coverage among people with weak labour market attachment

This chapter builds on the results of Chapter 5 and extends the microdata analysis to assess the match between active labour market policy (ALMP) needs and access to ALMPs. First, it evaluates how commonly people with weak labour market attachment are in contact with the Estonian public employment service (EUIF). After that, it analyses how well the ALMPs provided by the EUIF correspond to the obstacles people with weak labour market attachment face. Finally, the chapter assesses access to services that are similar to the ALMPs provided by the EUIF, but are provided by other institutions, thus permitting to assess gaps and overlaps in service provision by the system as a whole. Each of the three main sections concludes with a sub-section providing recommendations on how to address the challenges identified in the quantitative analysis and improve the system of ALMP provision.

For the analysis in this chapter, the data used in Chapter 5 is extended and linked on an individual basis to data on registrations with the EUIF and services and measures provided by the EUIF and other relevant providers. In particular, the data on services and measures covers ALMPs provided by the EUIF and NGOs through ESF-funded projects, as well as social, health and adult learning services that have similarities to the ALMPs implemented or managed by the Social Insurance Board, municipalities, Astangu Vocational Rehabilitation Centre (social services), the Health Development Institute, the Health Insurance Fund (health services) and the Ministry of Education and Research (adult learning programmes). Altogether, it is a unique dataset that enables to identify labour market obstacles of people with weak labour market attachment as well as to detect which services and measures these people received, allowing to draw conclusions on whether the provided services and measures target the individual needs of people.

The analysis in this chapter shows that only 40% of people who are weakly attached to the labour market are in contact with the EUIF. However, the referral rate to ALMPs is high (80%) once the contact has been established. Due to the recent Work Ability Reform, the share of people in contact with the EUIF and the share of people participating in ALMPs are markedly higher among people who have long-term health issues. At the same time, the outreach and coverage of (well-targeted) ALMPs is lower among the groups that face labour market integration obstacles related to low skills or caring responsibilities or who face particularly high obstacles to integrate into the society. Taken together, these results suggest that ALMPs in Estonia are generally well-targeted, but might not reach all the groups that would benefit from such support.

This section analyses the outreach activities of the Estonian Unemployment Insurance Fund (EUIF) to people with a weak labour market attachment. The statistics in this section provide insights on how successful the EUIF is in reaching people with a weak or no attachment to the labour market (following the methodology of Chapter 5, i.e. people who do not work at all, work with interruption, on precarious wage or have low earnings are considered to be weakly attached to the labour market). A person is considered to be in contact with the EUIF if he/she is a registered jobseeker (i.e. registered unemployed or other registered jobseeker i.e. “töötu” and “tööotsija”)1 for at least one day or received at least one ALMP from the EUIF within a given period of time. In both cases, a direct contact is established between the EUIF and the person and the interaction is recorded in the EUIF registers.2

Most of the results presented in this section focus on people who were weakly attached to the labour market in 2018, reflecting whether they had a contact with the EUIF between 2017 and 2019. Focusing on a 3-year time period permits to account for the fact that it can take some time before EUIF’s outreach activities and the ALMPs it provides have an effect (e.g. a person received support from the EUIF in 2017, but was still weakly attached to the labour market in the beginning of 2018; or the person was well attached to the labour market until late 2018 and contacted the EUIF in 2019). Annex Table 6.A.1 also reports results for other time frames, namely people in contact with the EUIF in 2018 and between 2012 and 2019.

The outreach of the EUIF to people weakly attached to the labour market has scope for improvement. Overall, only 39% of people with a weak attachment to the labour market in 2018 were in contact with the EUIF between 2017 and 2019 (Figure 6.1), corresponding to about 81 000 people. That is, more than every second person weakly attached to the labour market is out of the reach of the EUIF. When interpreting these results, one should keep in mind that the group considered to be weakly attached to the labour market in this report does not include frictional unemployment (out-of-employment periods up to three months), nor people who are unavailable for work because of severe health problems or because they are enrolled in the education system, etc., i.e. there might be even more people whose labour market status could potentially be improved by the EUIF. Conversely, administrative data are not always sufficient to reflect an individual’s full situation and might over-estimate the number of people with weak attachment to the labour market. For example, some people considered here to be weakly attached to the labour market might have severe health problems or addictions and might in fact be unavailable for work. If they do not have health insurance, they might not appear to have severe health limitations in the administrative data.

The share of persons in contact with the EUIF was highest (56%) among people who were employed a few months in 2018 (“Interrupted work” in Figure 6.1). This group comprises “traditional” groups of people in contact with the EUIF, i.e. people registering with the EUIF after recently losing their job as well as people who have been registered with the EUIF for a while and succeed in entering employment.

Conversely, being in contact with the EUIF was less common (33%) among people who did not work at all in 2018, pointing to a significant pool of people who are inactive and far from the labour market and yet have no contact with the EUIF. Among people who were weakly attached to the labour market in 2018, but did not have contact with the EUIF, many had been working for less than 12 months over the last three years (67%), underlining their distance from the labour market.

The Work Ability Reform has improved the contact between the EUIF and people with health obstacles, but other groups further from the labour market are often left behind. The share of people weakly attached to the labour market in contact with the EUIF is highest among those with health related obstacles to labour market integration (60% of weakly-attached people with health obstacles in 2018 were in contact with the EUIF in 2017-19) and was higher than in previous year.3 However, only 41% of people with skills obstacles were in contact with the EUIF in 2018, 35% of people with longer term integration challenges (and only 27% of people with longer term integration challenges without health problems) and 40% among people with family-related challenges (mainly care obligations).

The likelihood of contacts with the EUIF is positively correlated with the number of labour market obstacles people face. The EUIF was in contact at least once between 2017 and 2019 with 33% of weakly attached people with no identifiable labour market obstacles, 40% of people with at least one obstacle and 58% of people with at least three obstacles (Annex Table 6.A.1). Firstly, people with fewer obstacles might expect to be able to find a job on their own. Secondly, people with more obstacles are more likely to be referred to the EUIF by other stakeholders in the system when they need to receive services from them (e.g. social workers in municipalities).

Only 4% of people with solid labour-market attachment in 2018 contacted the EUIF in 2018, 13% of them over 2017-19 and 29% over 2012-19 (Annex Table 6.A.1). In many cases, these are people who had weak labour market attachment in the prior years, but managed to achieve (potentially with the support of the EUIF) a solid labour market attachment by 2018.

Inactive people constitute a particularly difficult group to reach out to for public employment services across countries as they have less incentives to register and they are less likely to contact the PES themselves, unless the PES can contact inactive people due to e.g. paying social assistance, parental leave or pre-retirement benefits (Konle-Seidl, 2020[1]).

If the institutional set-up does not encourage PES contacts with the inactive, the most effective and efficient way to reach out to the vulnerable groups is through networking with institutions responsible for social benefits as well as local level initiatives addressing specific target groups, such as activity centres for youth. In case these networks and institutions do not exist locally or do not reach the vulnerable groups sufficiently, physical outreach to the groups directly by the PES or the contracted-out providers might be necessary (e.g. physical distribution of information in the community, mentoring within the community, etc.). These approaches are used for example in particularly remote areas in Bulgaria and Australia.

In addition to co-operation with other institutions, PES can also increase its outreach to vulnerable groups through raising awareness – raising awareness to change employers’ attitudes, change the attitudes of the target population, change the attitudes of society to combat discrimination, increase awareness on the available ALMPs and encourage up-take, etc. (Mosley, Scharle and Stefanik, 2018[2]).4

The EUIF outreach to vulnerable groups could be increased by improvements in networking with other organisations (discussed later in the chapter in Section 6.4) as well as by raising awareness. The EUIF has been successful in recent years to reach out to low-skilled employed people and inactive population with health obstacles. Experience in generating awareness among these target groups could be used to address other groups that are currently left behind – older workers (including retirees), people with social integration obstacles, low-skilled inactive. Reaching out to older workers can be particularly important as the results in Chapter 5 show that people in older age groups have more often no attachment to the labour market, facing social integration and skills obstacles. The EUIF should communicate clearly what it can offer and how this benefits these groups, using indirect outreach channels (e.g. media), as well as direct out-reach (e.g. via employers). Some successful examples to reach out to similar groups are provided in Box 6.1 – WeGeBau in Germany to reach out to older low-skilled workers and the strategy in the United Kingdom to support older workers by awareness raising and dedicated ALMPs.

This section focuses on access to ALMPs provided by the EUIF among groups with a weak labour market attachment. It assesses to what extent EUIF’s ALMPs reach people with labour market difficulties, reporting the share of ALMP recipients among different population groups with weak labour market attachment. Finally, the section compares the labour market obstacles people face to the obstacles expected to be addressed by the ALMPs they receive, thus evaluating the match between people’s needs and ALMPs available to them. Based on these results, the section concludes with specific recommendations regarding EUIF’s ALMP package.

The previous section and Figure 6.1 cover direct contacts with the EUIF, i.e. the provision of ALMPs in the wider sense, involving regular job-focussed counselling and job mediation provided by the EUIF to all registered jobseekers. This section looks at ALMPs for which it is necessary for the employment counsellors to first detect a need to provide a specific ALMP and refer the client to this ALMP, and for the EUIF to provide the ALMP (depending on a policy whether outsource or provide in-house). Hence, this section does not cover counselling, information provision and job mediation that are provided to all clients.

The EUIF targets most of its ALMPs to people who are weakly attached or not attached to the labour market (Figure 6.2). Even though some ALMPs are open to everybody and are not subject to eligibility restrictions dependent on employment status, the ALMPs that the EUIF provides reach, in the vast majority of cases, people who are likely to need them. Among people with no or weak labour market attachment in 2018, 28% participated in ALMPs at least once between 2017 and 2019 (corresponding to almost 60 000 people), against 9% among people with a solid labour market attachment, with the latter including people who used to face labour market difficulties in the past, but successfully integrated in the labour market. 18% of people with a weak labour market attachment participated in ALMPs in 2018, against 3% of people with a solid labour market attachment (Annex Table 6.A.2).

In line with the results regarding the contacts with the EUIF (Figure 6.1), the share of ALMP participants (between 2017 and 2019) was highest among people who had interrupted work spells in 2018 (at 42%, corresponding to over 30 000 people), i.e. among the traditional client group of the EUIF consisting of people who recently lost their job as well as people who succeeded in finding a job after some period of unemployment. Simultaneously, the share of ALMP participants was considerably lower (at 22%) among people who did not work at all in 2018. This pattern further underpins that people who are very distant from the labour market and often have a long history of inactivity, are less likely to participate in ALMPs than other groups.

Nevertheless, once a contact has been established between the EUIF and a person with weak attachment to the labour market, the likelihood of detecting a need for a particular ALMPs is high. Comparing the results in Figure 6.1 and Figure 6.2 indicates that the EUIF counsellors referred 80% of the people in contact with the EUIF to a particular ALMP, as 31% of weakly-attached were referred to an ALMP while 39% had contact with the EUIF. Given that some clients did not participate in the ALMPs they were referred to, in total 72% of the clients benefitted from ALMPs i.e. they received support beyond work-focussed counselling and job mediation. The share of people referred to specific ALMPs (and participate in them) once they are in contact with the EUIF is similar across the sub-groups with weak labour market attachment, across the obstacles they are facing as well as across the number of obstacle types. Pensioners are the only group with significantly lower ALMP referral and participation rate, at 68% and 61%, respectively.

As the referral rates to ALMPs are similar across the different groups weakly attached to the labour market, the coverage of ALMPs is highly dependent on the share of people in contact with the EUIF. For example, once in contact with the EUIF, referral rates are almost identical for people with integration obstacles, motivation obstacles and geographic obstacles, all falling in a close range around 80%. Nonetheless, the share of people who eventually receive ALMPs differs significantly across these groups, reaching 25% for people with integration obstacles and about 40% for people with motivation obstacles or geographic obstacles. These differences are mostly due to differences in contacts with the EUIF.

As the EUIF has more contact with people facing multiple labour market obstacles, their coverage with ALMPs is also higher. People with multiple labour market obstacles are particularly likely to receive ALMPs from the EUIF, with a share of 42% among people with three or more obstacles against 29% among people with at least one obstacle and 24% among people with no labour market obstacles (2017-19).

Labour market services, training and employment incentives are the most common ALMPs targeted to groups with weak labour market attachment (Figure 6.3), using the classification of EC/OECD LMP database methodology). Among people with no solid labour market attachment in 2018, 24% received labour market services, 14% training and 6% employment incentives between 2017 and 2019. Supported employment and rehabilitation, direct job creation and start-up incentives were far less common, at 1.7%, 0.4% and 0.4%, respectively.

Across all types of ALMPs, ALMP participation is highest among persons weakly-attached to the labour market with health obstacles, compared to the groups with other labour market obstacles. Conversely, ALMP participation is low among those with integration and skill obstacles, also across most of the ALMP categories. Most concerning are the low share of the weakly-attached with skill obstacles participating in training measures (15%) and the low share of persons weakly-attached to the labour market with integration obstacles benefiting from employment incentives (5%). Nevertheless, the latter might be underestimated as employment incentives take the form of wage subsidies in Estonia and people with different kinds of obstacles might have benefitted from these measures in 2018 without being identified as weakly attached to the labour market due to their employment contract and regular labour income.

In addition to a higher likelihood of ALMP participation in general, people with multiple obstacles are also likelier to be referred to different ALMPs simultaneously or consecutively, addressing their multiple obstacles.

A wide set of ALMPs exists in Estonia, aiming to help people overcome different types of labour market obstacles that prevent them from finding employment and improving their labour market situation. In order to assess whether ALMPs are well targeted to the obstacles people face, it is necessary to classify ALMPs into different groups, identifying the main obstacles they address and match them with the categorisation of obstacles that people face (applied in the previous sections and Chapter 5).

For this analysis, six different categories are used to classify ALMPs, addressing:

  1. 1. Labour market integration in general (i.e. ALMPs preparing jobseekers for successful job search, provide the clients with career advice, etc.);

  2. 2. Skills obstacles;

  3. 3. Geographic obstacles;

  4. 4. Family obstacles;

  5. 5. Health obstacles;

  6. 6. Integration obstacles.

Among the approximately 50 ALMPs the EUIF provides, the majority addresses skills obstacles and health obstacles. There are also various ALMPs addressing labour market obstacles more generally (e.g. career counselling, work trials, career information centre), integration obstacles (e.g. debt counselling, wage subsidy, individual work placement) and several ALMPs addressing geographic obstacles (e.g. mobility support, regional job creation subsidy). Conversely, there is only one single ALMP classified as specifically addressing family obstacles, namely the care allowance (hooldusteenus), which, in addition, is not offered any longer. The full list of EUIF ALMPs and their categorisation is listed in Annex Table 6.A.8. and Annex Table 6.A.7 (in Estonian).

ALMPs supporting labour market integration in general are by far more frequently provided than other types of ALMPs (Table 6.1). Regardless of the exact obstacles people face, around 80% of them receive ALMPs that support their job search in general (alone or in addition to other, more specifically targeted ALMPs). Beyond general ALMPs, the EUIF frequently refers people to ALMPs focusing on skill obstacles, around 50% of ALMP recipients participate in these ALMPs across the groups with different obstacles. The frequent provision of more general ALMPs and ALMPs addressing skills obstacles can help improve labour market outcomes. General ALMPs, such as career counselling, are in many cases a precondition for a successful job search and are complementary to other ALMPs. ALMPs aiming to remedy skill deficiencies can also be beneficial for people facing other types of obstacles. For example, acquiring new skills required by the local labour market, or digital skills permitting to work remotely, may help overcome geographic obstacles. Re-skilling might be also necessary for people who can no longer work on their current job due to health obstacles even though they might not be low-skilled.

The ALMPs addressing specific labour market obstacles tend to correspond to the obstacles people face. For example, the share of people receiving ALMPs addressing geographic obstacles is higher among ALMP participants who face geographic obstacle as one of their labour market obstacles (24%) and lower among the groups facing other obstacles (although some of them also face geographic obstacles in addition). Similarly, 30% of ALMP participants with health obstacles receive ALMPs targeting health obstacles as at least one of the ALMPs they receive (the share is only 14% to 17.5% among other groups, which include only some people with health obstacles). The targeting of integration related ALMPs is also quite strong, although also commonly used by people with health obstacles and geographic obstacles. However, integration obstacle also occurs often simultaneously with health obstacles and geographic obstacles (see Chapter 5), which might cause the high participation in these measures by the respective groups.

ALMPs targeting skills obstacle (above all different training measures), however, do not seem to be well targeted to people with low skills. Although up- and re-skilling might be relevant across people with different obstacles (including for people with digital skills or outdated education that might not be fully accounted for in the data for skills obstacles in the current report), access to these measures should be particularly high among people with low skills. This is not the case as participation in ALMPs targeting skills is around 50% across groups facing different obstacles.

Also people with family related obstacles (above all care-giving) do not receive dedicated ALMPs from the EUIF and also their overall participation in ALMPs is lower than among most other groups (see Figure 6.2). The only ALMP that aimed at addressing family obstacles was scrapped in 2019. In principle, a support to addressing care responsibilities should be provided by the system of social services. Nevertheless, this support is currently weak in Estonia.

Among the ALMPs the EUIF provides, some are very well targeted and reach precisely the population group they are designed for, often due to strict eligibility criteria. For example, labour market training with a training voucher for the employed (Tööturukoolitus koolituskaardiga töötavatele) reaches in the vast majority of cases (86%) people facing some form of skills obstacle. Similarly, measures that specifically address health obstacles usually reach people that need them due to strict eligibility criteria. Among people receiving work-related rehabilitation (Tööalane rehabilitatsioon) in 2017-19, 94% faced health obstacles that were detectable in the data in 2018, whereas they were 96% among people receiving a travel-to-work allowance (Töölesõidu toetus).

Conversely, ALMPs with less strict eligibility criteria also reach people who may not necessarily need them and sometimes do not fully reach the people they are targeted to. For instance, the general labour market training for unemployed and jobseekers (Tööturukoolitus töötutele ja tööotsijatele, sh kutseeksam), which is a very common measure, also reaches many people without detected skills gaps, as about one-third of recipients face no skills obstacles to labour market integration. While participation in such a measure can be beneficial even to highly educated people with a well-developed skill set, referring such measures widely to this group and leaving the low-skilled behind may undermine cost-effectiveness (the so-called creaming might be taking place). Therefore, reassessing the targeting of widely provided training measures can be beneficial.

Likewise, employment incentives might not reach the groups that would mostly benefit from them, but are commonly referred to people with other obstacles. The wage subsidy (palgatoetus), which is primarily a measure for people with integrational obstacles (such as being out of the labour market for long, migration background, previous imprisonment), tends to reach only few people with such obstacles (31% of all wage subsidy recipients had integration obstacle), but is more commonly referred to people with health obstacles (37% of recipients with health obstacle, but no integration obstacle), family obstacles (36% of recipients with this obstacle, but no integration obstacle) and skills obstacles (48% of recipients with this obstacle, but no integration obstacle). Nevertheless, as wage subsidy programmes incur regular employment contracts and wage, not all of the target group might be observable in the data as the participants might not be identified as weakly attached to the labour market in 2018. Furthermore, contrary to most other ALMPs, wage subsidies have a strong element of self-selection (i.e. it is not a discretionary decision by the employment counsellor to provide this ALMP).

ALMPs related to start-ups, e.g. training for start-ups and business start-up subsidies, mostly reach people with no or little labour market obstacles. For example, among people receiving training for start-ups, only 25% face skills obstacles, 8% geographical obstacles and 14% health-obstacles, which are very low levels compared to other ALMPs. While jobseekers with few or no labour market obstacles can significantly benefit from such ALMPs and should continue to have access to them, these numbers point out that some groups, i.e. people living in remote areas, are not well reached by these measures.

Some adjustments to the ALMP basket provided by the EUIF might be necessary to ensure that persons with weak labour market attachment receive the support they need. The EUIF has chosen an approach to identify needs for ALMPs through work-focussed counselling and this has in general led to effective ALMP provision. On the one hand, this approach enables the counsellors to identify needs for ALMPs that could not be revealed by analysing data in the administrative registers. On the other hand, the data analysis in the current report indicates that for some groups facing specific labour market obstacles, the corresponding ALMPs might not be not be sufficiently accessible. This can happen when a counsellor fails to identify the need for an ALMP.

ALMPs addressing skill obstacles should be redesigned in priority. The comparatively lower outreach to persons with low skills and weak attachment to the labour market is coupled with a potentially insufficient provision of ALMPs addressing the skill obstacles among this group. The low-skilled EUIF clients do not receive markedly more ALMPs targeting skills (training measures) than those with higher skills. It is possible that to some extent, creaming takes place regarding the training measures, and training is often provided to those who are easier to refer to training measures as well as potentially easier to integrate to the labour market later on.

Further efforts should be made to refer and convince to participate in training measures also the low-skilled / low-educated as the potential positive effects of their participation are likely to be higher than for the high-skilled (see e.g. Leetmaa et al. (2015[8]) for an evaluation in Estonia). The EUIF has extensive guidelines to detect training needs and motivate the low skilled to take up training (the “Principles for Skills Development”, supported by the guidelines for work-focused counselling). Further training should be provided to employment counsellors to fully implement these guidelines in practice. In addition, training programmes could be adapted to fit better the needs of the low-skilled, minimising discouraging aspects and preventing dropping out. The latter could be done by providing counselling and mentoring during participation in training programme, discussing the challenges met and trying to address them. This counselling and mentoring should be conducted by the training conductor, in co-operation with the employment counsellor in case needed. In general, practical and work-based training offers tend to be more effective for this target group.

Furthermore, the outreach strategy to low skilled people with weak labour market attachment should be revised to promote up- and re-skilling directly and personally as raising general awareness might not be sufficient for this group. OECD (2019[9]) provides an extensive toolkit to engage low-skilled adults to learning, such as by finding creative ways to reach out to potential learners directly (e.g. community-based approaches and mobile outreach services), offering holistic and personalised advice and guidance (e.g. counselling of learning opportunities through the network of career counsellors), and creating interesting and relevant learning opportunities (e.g. designing online training to meet adult learners’ needs, particularly in the context of COVID-19). Many of these activities could be more effective if designed in co-operation of the institutions in employment and education policy (see also Chapter 3).

While the EUIF has increased its train-first5 approach to certain groups, extending its provision of training on digital skills and Estonian language, the train-first approach could be extended further, particularly considering the potential economic restructuring due to COVID-19 outbreak. Extending train-first approaches should involve using even more systematically and extensively than today the inputs from the EUIF Occupational Barometer6 and the national Skills Assessment and Anticipation exercise OSKA.7 Training-first approach could be generally prioritised for young low-skilled people as well as young drop-outs. For example, this rule has been introduced even in the ALMP regulation in Austria, Germany and Finland (Murray and Tubb, 2013[10]). In addition, Germany has introduced over the years ALMPs that effectively target and support school drop-outs in different ages (Box 6.2).

Regarding employees whose skills are particularly far away from the labour market needs, the practices of the Norwegian Skills Plus programme set a good example (Kompetanse Norge, 2016[11]). Although in Norway, this practice is implemented by an organisation under the Ministry of Education and Research, it could be easily adapted to be applied as an ALMP by a public employment service. The Skills Plus programme aims to provide adults with basic skills they need for the modern labour market, such as reading, writing, numeracy, digital skills and oral communication, and strengthen participants’ motivation to learn. While any private or public sector organisation is eligible for funding, outreach activities to involve the low skilled in the programme target above all SMEs and industries that tend to employ people with low formal skills.

Another group of ALMPs that should be redesigned, are employment incentives (the seven different types of wage subsidies). Previous international impact evaluations suggest that these types of policies are only effective in case these are well targeted to the most disadvantaged, such as people who have been out of employment over a longer time period (see e.g. Card et al. (2018[14]), Dar and Tzannatos (1999[15])). The analysis on the Estonian data indicates that on the one hand, the target groups for wage subsidies are quite wide; and on the other hand, that people with integration obstacles might not receive these measures markedly more than other groups with weak labour market attachment. While in worse economic conditions, the targeting of these policies could be wider to support job creation (such as in the recovery phase from the COVID-19 effects), in a better economic situation (such as in 2017-19), these measures should be more targeted.

Most importantly, the case workers of persons particularly discouraged about finding work should devote more efforts to present these clients to the employers (potentially in co-operation with the counsellors for employers), and promote wage subsidies for the employers as a tool to cover potentially lower productivity in the first months. Additionally, Estonia could consider restricting the target groups of wage subsidies to the most disadvantaged or granting wage subsidy reimbursements to the employer upon the decision of the employment counsellor. To grant the wage subsidy, the assessments of the profiling tool could be considered by the counsellor when deciding granting wage subsidy or alternatively could be used as a strict eligibility condition for wage subsidies without counsellor’s discretion. As such, only those people with the worst outlook on labour market integration could be targeted by wage subsidies. Furthermore, Estonia could consider using the clients’ probability of labour market integration based on the quantitative profiling tool (and counsellor’s assessment) to define the reimbursement rate of the wage subsidy. For example, in Austria, the counsellor can adapt the baseline reimbursement rate of wage subsidy depending on the situation of the jobseeker.

For particularly vulnerable groups, primary labour market integration even with a wage subsidy and other supporting measures might not be easily feasible. For these groups, one step on the pathway to employment can be working in a sheltered workplace / social economy before being able to be integrated into the primary labour market. In Estonia, sheltered and supported employment are provided only for people with profound health limitations, while in many countries, the means of social economy and the structures of NGOs are used to support also vulnerable groups with social integration obstacles more generally (see Box 6.3 for some of the more innovative examples from France and Austria; the Austrian example was also introduced to the Estonian stakeholders during a webinar discussing supporting vulnerable groups, organised in December 2020 in the framework of the same project as the current report). In any case, sheltered and supported employment should be provided together with other measures (above all training and mentoring) to be effective and aim at the integration into the primary labour market in the longer run.

Effective ALMPs for the integration of people furthest from the labour market are targeted, individualised and small scale, and potentially involving follow-ups after integration (Scharle, Weber and Puchwein Roberts, 2014[22]). While the EUIF provides generally an individualised approach to supporting its clients, as of up to 2020, the support is more intensive and involves follow-up only regarding people with long-term health obstacles. The Employment Programme 2021-2023 adopted in November 2020 foresees follow-up counselling to be provided more systematically from 2021 onwards. Follow-up counselling will be provided to client groups in risk of rapid return to unemployment due to health limitations, lack of work experience, previous long-term unemployment or other labour market integration obstacles. Case managers and disability employment counsellors will continue work-focussed counselling during the first six months of employment, keeping in touch with the client as well as the employer and, when necessary, involving municipality, service providers and social network. The experience form other countries, such as Germany, France and Denmark, shows that more intensive support and follow-up activities could indeed be effective also to long-term unemployed more generally (Box 6.4). As such, Estonia should ensure that sufficient resources would be available to implement the new provisions regarding follow-up counselling systematically across vulnerable groups, and fine-tune the processes, learning also from countries that have longer experience in implementing this practice.

Furthermore, support to people with family-related obstacles, particularly concerning care obligations, could be improved. However, long-term care and other caregiving services tend to be exclusively the responsibilities of the health care sector and social services, and not the responsibilities of PES, across the OECD countries. Yet, the public long-term care system in Estonia is generally less accessible to those in need. In 2017, Estonia spent on long-term care (health and social components together) only 0.2% of GDP, the lowest share among all OECD countries together with Hungary (the OECD average was at 1.7% of GDP, (OECD, 2020[24])). The share of people over 65 receiving long-term care in institutions or at home has been half the OECD average level over the past years. This situation has been the reason why care obligations represent a particularly challenging obstacle to labour market integration that needs to be tacked by the EUIF and also the reason why the care allowance was introduced in 2011.The care allowance was a short-term reimbursement of care giving costs when participating in training or taking up a new job.

ALMPs can play a role in helping people with care responsibilities to return to work, but they cannot substitute social and health services in the long-term and support substituting public infrastructure with private providers. Building the capacity of institutions providing health care and social services should be the main way to tackle challenges concerning care obligations. Furthermore, the different services should be accompanied by employment policies that support flexible working models and other work-family reconciliation policies, tax-benefit incentives to return to work (Mosley, Scharle and Stefanik, 2018[2]).

ALMPs and PES activities to support people with care responsibilities in other OECD countries involve above all promoting the flexible working models to employers and people with care, networking with the other service providers to find the solutions for people with care responsibilities, and reimbursing temporarily care giving costs (e.g. subsidising childcare provided or reimbursed8 by the employer and/or private providers in general as it used to be the case in Estonia). Good examples to support parents returning to work are in Austria (multifaceted support combining care allowance, restart bonuses and training),9 and supporting people with care responsibilities in general in Germany (Box 6.5).

In Estonia, the role of the EUIF and its employment counsellors could be to assist the people with care obligations by networking with the relevant organisations and finding the solutions together, promoting a holistic view of clients (see also Section 6.4), but also supporting them in overcoming other labour market challenges they might face, such as potentially outdated skills. In case it will be possible to increase the EUIF outreach to people with care obligations, Estonia could consider re-introducing and re-designing temporary reimbursements for care allowances, from Austria and Germany.

This section focuses on gaps and overlaps in the service provision between the EUIF and other service providers. The section identifies ALMPs provided by the EUIF that are particularly prone to overlaps due to stark similarities with services provided by other institutions. Finally, it evaluates service coverage of the system as a whole, i.e. the share of groups with weak attachment to the labour market that receive ALMPs or similar services from any public provider, and assesses the match between these services and people’s labour market obstacles.

All services and measures provided by the state and municipalities can have direct or indirect effect on the social and labour market integration of the citizens – e.g. providing childcare facilities supports people being available to work, a functioning public transportation system supports people to reach workplaces. While these can be vital for some individual cases for labour market integration, in general many of these services serve wider objectives. This section looks only at services and measures provided by other institutions than the EUIF that are tightly linked to labour market integration, i.e. have similarities to the ALMPs provided by the EUIF or are complementary to them.

More specifically the following services and measures are analysed in this section:

  • Social services similar to ALMPs – support person service, personal assistance service, social transport service, debt counselling provided by the municipalities; social rehabilitation, technical aids and special care services provided by the Social Insurance Board; social services that have similarities to the EUIF policies provided through ESF 2015-20 (some measures under Priority 9.4 measures 2.2.3 and 2.2.1, Priority 8.1 measures 3.1.1) and provided by Astangu Vocational Rehabilitation Centre, municipalities, the Social Insurance Board.

  • Health services similar to ALMPs – Health services that are provided by health care providers to non-hospitalised clients and have similarities to work-related rehabilitation, psychologic counselling and technical aids provided by the EUIF (e.g. physiotherapy, speech therapy, medical rehabilitation, psychologic counselling, orthoses); alcohol addiction treatment provided by the Health Development Institute (ESF 2015-20 funded, under Priority 9.4 measure 2.3.1).

  • Adult learning and ALMPs provided by other organisations than the EUIF – adult learning programmes provided by the Ministry of Education and Research through ESF 2015-20 (some measures under Priority 10.3 measures 1.6.2), ALMPs and adult learning programmes provided through ESF 2015-20 funding (selection of measures under Priority 9.4 measures 2.2.1, Priority 8.1 measures 3.2.1).

While almost a half of persons weakly attached to the labour market get some support from the EUIF and a third are supported with specific ALMPs (see Sections 6.2 and 6.3), almost a fifth of these groups receive services from other providers that have similarities to the ALMPs provided by the EUIF (Figure 6.4). While social services, adult learning and ALMPs provided by other providers concern a limited number of people only, health services resembling ALMPs are more widespread. About 16% of people who were weakly attached to the labour market in 2018 received health services that are similar to ALMPs at least once between 2017 and 2019, most commonly physiotherapy.

Access to health services is underpinned by health insurance coverage. People who did not work at all in 2018, were the least likely to be in contact with the EUIF (see Figure 6.1) and thus had no access to health insurance through registered unemployment nor employment. As a consequence, only 13% of people who did not work in 2018, received ALMP-related health services in 2017-19, while this share was 16% among the groups with weak labour market attachment on average and 17% among those well-attached to the labour market as well as pensioners with weak attachment (both last groups fully covered by health insurance). Access to health services was also particularly low among people with integration obstacles as this group includes a large share of persons who have been out of employment over a longer period. Nevertheless, the difference in access to health services between persons with weak and good attachment to the labour market can be caused partly also by an easier access to health-related ALMPs once a contact with the EUIF has been established, potentially substituting some services that could be provided by the health care service providers instead.

The introduction of the Work Ability Reform has increased access to all ALMP-related services for persons with long-term health obstacles and weak attachment to the labour market. First, the funding of these services increased also beyond the ALMPs provided by the EUIF and second, the objectives of the Work Ability Reform have been widely promoted across the institutions involved. As such, the participation rates among this group with health-obstacles is two to three times higher than among other groups of weakly-attached people across the different types of services. In any case, most of the social and health services included in this analysis also target specifically long-term health challenges (see also the next subsection).

Adult learning programmes and ALMPs that are not provided by the EUIF do not always target weakly attached people with low skills. This concerns particularly adult learning programmes provided by the Ministry of Education and Research through ESF 2015-20 (some measures under Priority 10.3 measures 1.6.2, excluding training courses targeting education sector staff). Among people with a weak labour market attachment who participate in these programmes, about 60% face skills obstacles, which is less than among the weakly-attached people in the training programmes provided by the EUIF (71% across programmes targeting skills obstacles). That is, such programmes are also commonly provided to people who do not have major skill gaps, such as people with professional or higher education. In addition, the programmes are also more often provided to people with a solid labour market attachment to support adult learning in general, with a broader focus than overcoming the obstacles faced by the low-skilled. As a consequence, the adult learning programmes financed via the ESF increase human capital more generally, but are less specifically tailored to the challenges arising from low skills than the adult learning programmes provided by the EUIF.

The total outreach of ALMPs and similar services is relatively high. Overall, 40% of people who were weakly attached to the labour market in 2018 had access to some labour market related services between 2017 and 2019 (Figure 6.5), i.e. 12 percentage points higher than the coverage of ALMPs provided by the EUIF only. Furthermore, almost half of this group (48%) got some support from the system considering also work-focussed counselling and job mediation provided by the EUIF.

People who are more likely in contact with the EUIF are also more likely to participate in ALMPs by the EUIF and services similar to ALMPs by other providers. For example, people who worked partially in 2018 were more likely to receive ALMPs and similar services than other groups, reaching 62%. Similarly, people facing long-term health obstacles were particularly likely to receive at least some service (74%). Furthermore, a higher number of labour market obstacles was associated with a higher probability of receiving such services.

Nonetheless, even when considering the system as a whole, a significant share of people with labour market difficulties does not receive any labour market services at all. This concerns particularly the people who are the furthest from the labour market, such as people who do not work at all (only 39% of them received some labour market services) and people with obstacles to integrate to the society (42% received such services).

The results on the total outreach of the system underline needs for improvement in reaching out to the most vulnerable groups in the labour market, potentially by further emphasis on outreach activities by the social workers in the municipalities as well as co-operation and networking between the organisations to guide the most vulnerable to the services they need.

The match between services from the system as a whole and labour market obstacles performs similarly to the ALMPs provided by the EUIF (Table 6.2). Especially people with long-term health obstacles often receive specific services related to health, in addition to general services. Also people with geographic obstacles are more likely to receive these types of services compared to people without such obstacles. However, there is scope for better targeting of services that should be addressing skills obstacles as well as obstacles to integrate into the society. As such, many of the needs for improvement that concern ALMPs provided by the EUIF, are relevant also for the other service providers. For example, it is necessary to increase the outreach of training measures and apply the results of the Skills Assessment and Anticipation exercise OSKA and the EUIF Occupational Barometer systematically across different adult learning programmes, including those not provided by the EUIF – the Open Calls Projects and the ESF programme of the Ministry of Education.

Furthermore, the results indicate that people with family-related obstacles might be not well supported with services addressing these obstacles. Nevertheless, this analysis does not involve all these services provided by the providers of health care and social services as these do not have similarities with ALMPs provided by the EUIF.

As over the years the EUIF has started to provide ALMPs that have similar components to health care and social services and as some programmes financed via the ESF funding cover ALMPs and adult learning, similar services can be potentially provided by several institutions.10

The potential overlaps of service provision between the EUIF and other service providers concern health care services (see Figure 6.6) as 24% of EUIF clients in 2017-19 received some service from the health care providers that was similar to ALMPs provided by the EUIF. Participation in other types of services while being in contact with the EUIF is relatively rare. Furthermore, people with long-term health obstacles in contact with the EUIF are also more likely to receive services from all other providers – health care providers, social service providers as well as adult learning ALMPs financed from the ESF funding.

The data on participation in services from other providers while in contact with the EUIF indicates also that some networking and co-operation between the different institutions probably does take place. The more obstacles a person with weak attachment to the labour market has, the more likely it is that this person receives services from several different service providers.

For some of the ALMPs provided by the EUIF there is a higher risk of duplication by other service providers as similar services are provided by other institutions. In particular, this is the case for technical aids, rehabilitation services, providing support persons for people with health issues, support with transport for people with health obstacles, debt counselling and addiction counselling.

However, overlaps between different services are quite rare. The biggest overlap detected in the dataset is between technical aids provided by social service providers, health service providers (only orthoses in this analysis) and the EUIF. About 4.5% of people who receive such services received them from at least two providers. Nevertheless, there is virtually no overlap between technical aids provided by the EUIF and other service providers as the overlap concerns almost exclusively technical aids from health services and social services. Close to 10% of people receiving such services from social service providers also received them from health service providers.

A higher but still moderate level of overlap exists for rehabilitation services, as about 7.5% of people who receive such a service, receive it from at least two different providers. The majority of people receive rehabilitation services only from health services. However, when people receive rehabilitation services from the EUIF or social service providers, a considerable fraction (> 50%) receives, in addition, rehabilitation services also from health services.

Overlaps for other services (support persons, transportation services in case of health obstacles, debt counselling, addiction counselling) are less common.11

To encourage holistic approaches across the providers of employment, social and health services, networking and building partnerships have to be maintained strongly in the EUIF agenda. A Eurofound (2017[26]) study among EU countries indicates that poor co-ordination of employment and other services tends to be the key issue limiting the provision of effective services and measures to the economically inactive people. Even in countries like Denmark where municipalities co-ordinate both employment and social services on the local level, the services are often provided by several different local authorities and offices, which can be complex for the citizens.

To overcome the fragmentation of services, PES across countries are increasingly co-operating with social service providers to reach and support vulnerable groups more effectively. For example, as the Finnish system of employment and social services has been largely operating in two different silos, the creation of one-stop-shops for NEETs has been an effective approach (Box 6.6). In the Estonian system it would not make sense to create new employment centres specifically for youth in the current institutional set-up and well-developed employment services (Scharle et al., 2018[27]). However, some approaches of the Finnish one-stop-shops could be useful to be adopted in the existing Estonian youth centres (noortekeskused) and particularly in the activities of Youth Prop Up (noorte tugila).

Furthermore, platforms for one-stop-shops could be envisaged for other particularly vulnerable groups without changing the overall institutional set-up. Co-operation practices between employment and social services without fundamentally changing the institutional set-up have been tested also in many other countries, such as Belgium (Flanders), France, Slovenia and Sweden. Instead of full formal merger of services, these countries have practiced multidisciplinary teams and partnerships based on informal and voluntary co-operation. These practices are successful in case both/all parties have a willingness to co-operate and at least some capacity to do so. The joint case management should concern above all clients that need simultaneous support from several service providers, as there are clients who need only ALMPs, as well as clients who need first strong support by social welfare services (e.g. solving housing or mobility issues, home violence, difficulties with everyday activities) before ALMPs could be helpful. The experience of Flanders could also be an example on how to improve information exchange between institutions to support joint case management.

In addition, Estonia could consider scaling up the Youth Guarantee Support System tool that links data from nine different registers to detect NEETs and facilitates the social workers to reaching out to NEETs and network with other service providers in case needed (see also Chapter 4). This tool could potentially be extended to other age groups to enable reaching out to discouraged workers more generally.


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[12] Bundesagentur für Arbeit (2016), , https://www.arbeitsagentur.de/datei/zukunftsstarter-arbeitnehmer_ba014616.pdf.

[25] Bundesministerium für Familie, S. (ed.) (2020), Perspektive Wiedereinstieg, https://www.perspektive-wiedereinstieg.de/Navigation/DE/startseite_node.html.

[7] Business in the Community (2020), Age Leadership Team, https://www.bitc.org.uk/leadership-teams/age-leadership-team/.

[14] Card, D., J. Kluve and A. Weber (2018), “What works? A meta analysis of recent active labor market program evaluations”, Journal of the European Economic Association, Vol. 16/3, pp. 894-931.

[15] Dar, A. and Z. Tzannatos (1999), Active Labour Market Programs: A Review of the Evidence from Evaluations, The World Bank, Washington D.C., http://documents.worldbank.org/curated/en/246161468740363969/Active-labor-marketprograms-a-review-of-the-evidence-from-evaluations.

[5] Department for Work and Pensions (2020), Help and support for older workers, https://www.gov.uk/government/publications/help-and-support-for-older-workers/help-and-support-for-older-workers.

[6] Department for Work and Pensions (2020), Sector-based work academy programme: employer guide, https://www.gov.uk/government/publications/sector-based-work-academies-employer-guide/sector-based-work-academies-employer-guide.

[26] Eurofound (2017), Reactivate: Employment opportunities for economically inactive people, European Foundation for the Improvement of Living and Working Conditions: Publications Office of the European Union, Luxembourg, https://www.eurofound.europa.eu/sites/default/files/ef_publication/field_ef_document/ef1728en.pdf.

[18] Grandguillaume, L. (2019), Territoires Zéro chômage de Longue Durée.

[16] Hiebl, J. (2020), Outreach to and ALMPs for people furthest from the labour market.

[11] Kompetanse Norge (2016), SkillsPlus, https://www.kompetansenorge.no/English/Basic-skills/Competenceplus/.

[1] Konle-Seidl, R. (2020), Activation of the Inactive: PES initiative to support the activation of inactive groups, European Commission, https://ec.europa.eu/social/BlobServlet?docId=22474&langId=en.

[19] Konle-Seidl, R. (2019), Zero Long-Term Unemployment Territories. Comment from a German Perspective.

[4] Konle-Seidl, R. (2017), Retention and Re-integration of older workers into the labour market: what works?.

[8] Leetmaa, R. et al. (2015), Counterfactual Impact Evaluation (CIE) of Estonian Adult Vocational Training Activity, Praxis Center for Policy Studies, http://www.praxis.ee/wp-content/uploads/2015/02/Praxis_CIE_Estonia_31Oct2015_EN.pdf.

[21] Mašidlauskaitė, R. (2018), Ad Hoc Module to the 2018 PES Capacity Questionnaire Survey report, European Commission. European Network of Public Employment Services, https://ec.europa.eu/social/BlobServlet?docId=20186&langId=en.

[30] Ministry of Economic Affairs and Employment (2020), Government proposes to expand the local government trials on boosting employment, https://tem.fi/-/tyollisyyden-kuntakokeilun-taydennys?languageId=en_US.

[31] Ministry of Economic Affairs and Employment (2020), Minister of Employment Haatainen: Government budget session decisions support the achievement of the employment target, https://tem.fi/-/tyoministeri-haatainen-budjettiriihen-paatokset-tukevat-tyollisyystavoitteen-saavuttamista?languageId=en_US.

[32] Ministry of Economic Affairs and Employment (2020), Minister of Employment Haatainen: Government spending limit discussion and supplementary budget support the processing of applications and multi-professional services, https://tem.fi/en/-/tyoministeri-haatainen-kehysriihesta-ja-lisatalousarviosta-tukea-tyottomyyshakemusten-kasittelyyn-ja-monialaiseen-palveluun.

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[24] OECD (2020), Long-term Care, https://www.oecd.org/els/health-systems/long-term-care.htm.

[9] OECD (2019), Getting Skills Right: Engaging low-skilled adults in learning, OECD Publishing: Paris, http://www.oecd.org/employment/emp/engaging-low-skilled-adults-2019.pdf.

[34] Pôle Emploi (2020), Pôle Emploi, https://www.pole-emploi.org.

[33] Pôle Emploi (2018), Rapport Annuel 2018.

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[35] Scharle, Á. (2012), PES and older workers, European Commission: Brussels, http://ec.europa.eu/social/BlobServlet?docId=14077&langId=en.

[27] Scharle, Á. et al. (2018), Study on integrated delivery of social services aiming at the activation of minimum income recipients in the labour market - success factors and reformpathways, European Commission, https://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=8148&furtherPubs=yes.

[22] Scharle, Á., T. Weber and I. Puchwein Roberts (2014), PES approaches for sustainable integration of long-term unemployed. Toolkit, European Commission, http://ec.europa.eu/social/BlobServlet?docId=14078&langId=en.

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[17] University of Oxford (2020), World’s first universal jobs guarantee experiment starts in Austria, https://www.ox.ac.uk/news/2020-11-02-world-s-first-universal-jobs-guarantee-experiment-starts-austria#.

[13] Wieland, C. (2020), Die Ausbildungsgarantie in Österreich, https://www.bertelsmann-stiftung.de/fileadmin/files/BSt/Publikationen/GrauePublikationen/Ausbildungsgarantie_Oesterreich.pdf.


← 1. In the Estonian legal system, jobseekers are a distinct category with different rights and obligations than registered unemployed. A jobseeker can be an unemployed or an employed person looking for a job. The term covers, for example, people in employment looking for a new job, including people who have received a redundancy notice from their employer, or people in retirement age looking for a job. In the current report, the term jobseeker is defined as in the Estonian legal system only if explicitly stating this. In all other cases, a jobseeker is defined more generally as an unemployed or an employed person looking for a job, covering both “registered unemployed” as well as “jobseekers” in the Estonian legal system.

← 2. A few specific ALMPs are not recorded in the EUIF registers by individuals (such as general counselling within rapid response service, MOBI, job fairs) and are therefore not taken into account.

← 3. The Work Ability Reform has provided significant incentives for people with long-term health problems to contact the EUIF through work ability benefits and new ALMPs. In addition, health insurance coverage can be an incentive for people with temporary or recently discovered health problems.

← 4. See a thorough overview on approaches to reach out to inactive population through generating awareness as well as other approaches in Mosley et al. (2018[2]) concerning older workers, working-age women and migrants and in Scharle (2012[35]) concerning older workers.

← 5. A train-first approach focuses on increasing jobseekers’ employability first, rather than prioritising a quick entry into employment (the work-first approach).

← 6. https://www.tootukassa.ee/eng/baromeeter.

← 7. https://oska.kutsekoda.ee/en/.

← 8. An example from France: https://travail-emploi.gouv.fr/droit-du-travail/les-contrats-de-travail/article/le-cheque-emploi-service-universel-cesu-declaratif..

← 9. https://www.ams.at/arbeitsuchende/karenz-und-wiedereinstieg/so-unterstuetzen-wir-ihren-wiedereinstieg.

← 10. If several institutions provide similar service to tackle the same obstacle, it could lead to overlaps and inefficiencies (e.g. similar technical aids are provided by social service providers, health care service providers as well as ALMP providers). At the same time, different services by these three types of service providers might be necessary to tackle multiple labour market obstacles as well as the same obstacle in certain cases (e.g. a person who has to change occupation due to injuries from an accident might need health-related rehabilitation measures from the health care sector, technical aid from the Social Insurance Board and re-training from the EUIF). Although the EUIF provides work-related rehabilitation and technical aids for working, these might not be always advisable substitutes for the services from other providers.

← 11. The overlap concerning services provided by the municipalities might be underestimated as not all municipalities insert the data on their social services sufficiently into the central IT database STAR.

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